Different Sides See CBO Report Differently

It took no time for the warring factions over health care reform to forge opposite interpretations of the Congressional Budget Office’s latest estimates.

The federal agency on Wednesday predicted that under the Republican law narrowly passed in the House three weeks ago, the number of Americans without insurance would increase by 14 million by next year and could reach a total of 51 million people by 2026. That is slightly less than the 10-year number the CBO estimated when it analyzed a previous version of the Republican measure in March.

Across Texas and in Washington, D.C., both those who supported the Republican health care law and those who have decried it were swift Wednesday afternoon to claim that these new CBO findings verified their positions.

“Today, the CBO confirmed the American Health Care Act will further lower premiums, deliver more immediate tax relief for individuals and families and decrease the deficit,” Rep. Kevin Brady, R-The Woodlands, said in a statement. Brady was one of the chief architects of the Republican law known as the American Health Care Act.

A longtime critic of former President Barack Obama’s signature Affordable Care Act, often called Obamacare, Brady said the CBO report is “an important step toward rescuing Americans from Obamacare’s failures – including fewer and fewer health care options and higher and higher premiums.”

Yet nearly simultaneously, Rep. Lloyd Doggett, D-Austin, who serves with Brady on the House Ways and Means Committee, saw it completely differently, sending out his own statement: “CBO confirms that the Republican repeal bill remains a real loser, with millions still losing their access to a family physician while costs soar. Little wonder that Republicans voted first and asked questions later. It puts America last.”

In any case, the bill faces a challenging political climate in the months ahead and may not pass in its current form.

Ken Janda, president and CEO of Community Health Choice, an insurer that draws many lower- and moderate-income consumers in the Houston area, has previously found little to like in the Republican plan, fearing that it will harm the vulnerable.

He reiterated on Wednesday his prediction that at least a half million more Texans could become uninsured under the AHCA in the next few years, erasing half the gains under the ACA. It is a direction he said the state can ill afford to turn as Texas already leads the nation in the number of uninsured.

“Even those who keep their plans will either pay more or have a plan that covers less,” he said. “Having carve-outs in insurance is not a good idea.”

Mandates would go

The ACHA would eliminate the individual and employer mandates that require nearly everyone to have health coverage. It also allows insurers more flexibility to offer plans with less coverage options. While the CBO said some premiums would indeed be cheaper, “that would be in part because the insurance, on average, would pay for a smaller proportion of health care costs.”

The CBO report said the federal deficit would be reduced $119 billion over a decade, which is significantly less than the $150 billion in savings estimated two months ago. And the report predicted that while premiums could become cheaper for some, their coverage might be skimpy. Costs could rise or become out of reach for older Americans, the poor and people with more medical needs, the report said.

An amendment to the original Republican law also would allow individual states to ask for waivers exempting them from other mandates in Obamacare, including a requirement that all plans include such things as maternity care or mental health coverage. States also would be given the option to find creative ways such as high-risk pools to cover those with the most medical needs, including pre-existing conditions.

The CBO predicted that about one-sixth of Americans will live in states where both would happen. In those states, average premiums would go down because younger and health people will purchase narrower coverage.

But at the same time, it also said, “premiums would vary significantly according to the health status and the types of benefits provided, and less healthy people would face extremely high premiums.”

“I’m assuming Texas will be one of those states,” Janda said.

So far, Gov. Greg Abbott has offered no hints at whether he would apply for the waivers.

Merrill Matthews, resident scholar at the Institute for Policy Innovation, a Conservative think tank in Irving, said Wednesday that the “CBO completely missed” its projections on access to insurance.

He strongly favors a return to high-risk pools to make sure those with expensive medical needs will have access to coverage and that by dropping some of the health benefit requirements it will be more equitable to the majority of people.

“I’m not convinced that the Affordable Care Act has done as well as some people think,” he said, arguing that because many plans now offered come with such high deductibles, even if people have coverage they cannot afford to use it.

Touts free market

Under the ACA, an estimated 20 million people previously uninsured gained coverage. Republicans have promised that under their law anyone who wants coverage would have access to it.

Matthews predicted that with fewer restrictions, the insurance industry would be able to better cater to people’s needs and that the free market would bring premiums and deductibles down. He sees the overall findings of the CBO “very good news for Texas.”

“Republicans will think they dodged the bullet with this,” Matthews said. “They will feel it could have been worse.”

“I have no idea why they would think that,” said Anne Dunkelberg, associate director of the Austin-based Center for Public Policy Priorities.

She worries not only about the CBO estimates of the number of people who would become uninsured but also what would happen to those who need insurance most.

“It’s dramatically harmful to seniors and people with low incomes,” she said.

For instance, according to the CBO, a 64-year-old making $26,500 per year buying an individual plan under the current law would pay, after subsidy, $1,700.

Under the AHCA, that same 64-year-old, after the tax credit would pay between $13,600 to $16,000 depending on whether his or her state applied for some waivers.

Under the law, the way assistance to buy premiums is shifted from an income-based subsidies to a flat tax credit based on age.

Republican plans to repeal and replace the current law have proven more difficult than they anticipated.

The bill is headed for the Senate, where members have promised an overhaul. It is unclear what the Senate bill will look like and whether the latest CBO report’s findings will hold